New Delhi: In the wake of the strengthening rupee and consequent pressure on profit margins, Indian exporters are exploring euro-denominated trade opportunities as their enthusiasm with regard to export performance has been severely dampened, a Ficci survey has revealed.
The survey on exports said that a combination of factors such as rising costs of raw material and hike in interest rates have jolted the confidence level of Indian exporters despite the positive announcements made in the trade policy supplement for 2007-08.
The exporters are on the lookout for clients and markets where the euro could be replaced as a medium of exchange for the US dollar. This move on part of the exporters indicates that over the next few months India’s exports to the US may witness a slowdown, while exports to the EU may increase, the chamber said in a statement.
The survey, which drew responses from 304 companies, showed that the recent movement in the rupee value has started impinging on the exporters’ performance.
Meanwhile in Kuwait, the central bank has abandoned pegging its currency to the US dollar and returned to linking it to a basket of currencies, saying that the dollar’s fall has had “negative effects” on the country’s economy.
AP contributed to this story